Building and Binding the Nation through Supply Chain

Published by MBA Skool Team, Published on September 12, 2014

1.2 billion Population of India is fed by 6.2 million tonnes of Food grains every year which has been practicable only because of the backbone of Supply chain management (SCM)

The Procurement, storage and transportation of wide range of goods right from food grains to essential Engineering products to various parts of India has been endued only through this all-inclusive spectrum of supply chain network ensuring better livelihood of people.

India could intrinsically dream of becoming an economic super power by developing its accessibility mechanism through SCM. Its role in shaping India socially as well as economically has been profound ever since Post-Independence which was the period to overhaul the shackled economy. It was mandatory obligation of the government to feed the vast population and pull up the status of ‘Below poverty line’ (BPL) households.

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It was a phase of transformation when Green revolution was initiated. The mechanization of agriculture led to better irrigation facilities, availability of high variety seeds, Pesticides and Fertilizers. The huge production in North western parts of India (Punjab, Haryana, Madhya Pradesh, and West Bengal) had to be distributed to every corner of United India in order to ensure food security and food availability to millions of Indians. How might have this been achieved given the scope of India’s geographical boundaries? It was innervated efficaciously by the Food Corporation of India (FCI), the nodal agency of Government of India through effective Public distribution system which encompasses every aspect of SCM.

FCI guarantees the procurement of Wheat, Paddy and coarse grains from farmers with minimum reasonable compensation to them for their produce. The establishment of no of purchase centres at various Mandis and key points facilitate the expedition of the produce to these Loci. Such extensive and effective support operations carried by FCI has encouraged higher investment in agriculture sector for improved productivity with the incursion of big giants like ITC who implemented E-Choupal System to check the market prices at a click of a button.

But before the produce reaches market, the procured stock of millions of tonnes is scientifically stored and FCI ensures that such storage depots and warehouses are strategically located all over India in order to provide easy physical access in remote and inaccessible areas. Government has to ensure minimum losses in this quality control process of bulk handling of the produce.

The stock preservation system in India is quite extensive with facilities such as fumigation and aeration of stored grains, effective handling to avoid moistening and infestation of food grain bags. The qualified and experienced personals are involved in the whole process of maintenance and security of stocks from all the environmental shocks.

The herculean task of transporting food grains from the surplus to deficit states comes under the gamut of Supply chain wherein a regionally balanced, sustainable, efficient and reliable multi-nodal transport system was required to be built. It was enhanced by vast expansion of Railways, Roadways and Waterways connectivity which led to increase in movement of goods across the country.

The efficacy of SCM in Indian context can vividly be supported by the spread of India’s transportation system. India has the fourth largest rail network and 2nd largest road network in the world. India has witnessed extensive modernisation, improvement in speed of transportation to satisfy the needs of rapidly growing economy.

448 million tonnes of produce is in transition every year which has been made possible by SCM with its huge capital intensive investment in transportation sector.

The scope of SCM has broadened further with increase in disposable income, consumerism and Purchasing power of people.

The dispatch of the food produce to various retail chains brings in the concept of packaging, merchandising and delivering with efficiency.

The role of IT has emerged consequently with private sector participation. The use of Radio Frequency tags (RFID) for real time tracking has enabled efficient delivery system.

Similarly, if one would see Industrialization phase in India post-independence, there has been promotion of heavy industries like Steel authority of India where Volume to Weight ratio is very low.

The expedition of coal from mines to energy deficient zones has only been made possible through intimate supply chain availability. Freight Infrastructure under Supply chain management has essentially been the key driver to mobilize this productivity to all parts of India to ensure continuous energy supplies for carrying host of Industrial activities.

Ashok Leyland which is India’s 2nd largest commercial vehicle manufacturer has effectively used IT and E-commerce technology to metamorphose from physical ordering system to Electronic ordering system. The largest supplier of military truck has ensured protection of our nation’s boundaries from infiltrators. Such is an Impact of Supply chain management and logistics in context of safety, food security and high GDP growth.

One cannot define SCM with clear-cut boundaries whose horizon is expanding on delving furthermore. For instance, a flour mill can always backward integrate with farming for easy procurement of wheat and simultaneously forward integrate with Bread making industries for easy market for their product thus reducing the distribution and transaction costs.

Tata steel too can procure iron ore mines for easy accessibility of raw material for their steel plants in Jamshedpur which can then be sent to Chennai at Ashok Leyland factories for the production of Heavy defence vehicles and equipment. These Utility vehicles can then be transferred to North-western regions of Kashmir, Kargil and Siachin to protect Indian borders from Enemy’s threat.

Thus SCM provides cost effective solutions to meet customer’s expectations in timely manner. All things are flawlessly handled through sustainable methods under world class managerial skills of SCM.

Imagine a day of cessation of operations!!!! How chaotic the situation would be. Everything would come to a standstill.

Right from procuring raw materials to transformation into finished goods and eventually sending across miles to reach targeted destinations through Distribution channels is a job of great risk which can efficiently be managed by supply chain management.

I see SCM impacting all our lives very closely. All host of activities like Inventory management, Stock-outs, forecasting demand, storage and go downs, internet facilitation for order placing, Communication channels, transportation, shipping and delivering, reduced supply lead times, outsourcing of technology, packaging, failures etc. is handled through operational efficiency of SCM.

Supply chain management is the next league drive for transforming India into Economic super power through extensive connectivity. I see SCM playing a role of Economic leadership galvanizing Nation towards sustainable growth.

This article has been authored by Akansha from IIMC


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